By Kit Norton
Masco stock surged on Wednesday, making it a S&P 500 performer after the home improvement company handily beat expectations for first quarter earnings and affirmed guidance. Consumer interest in remodeling appears to be picking up.
Masco posted first-quarter earnings of $1.04 a share, up from 84 cents a share a year ago and well above Wall Street's call for 88 cents a share. First-quarter revenue rose 6.5% to $1.92 billion, beating the analyst expectation for $1.83 billion, according to FactSet.
Masco shares surged 12% to $74.69, vying with GE Vernova stock as the best performing S&P 500 component in the trading session. The stock is on pace for its largest percent increase since March 24, 2020, when it rose nearly 15%, according to Dow Jones Market Data.
Shares are also up 24% in April, part of an 18% gain so far this year. However, Masco stock remains about 12% below its all-time closing high of $85.71 from Oct. 18, 2024.
A weak housing market and high interest rates have made consumers less willing to spend on home renovations, but Masco's earnings results appear to show consumer appetite growing for certain remodeling projects.
The plumbing-focused home improvement company said its sales growth was primarily due to "favorable pricing" and that the first quarter was its strongest year-over-year volumes performance since the end of the Covid-19 pandemic. The company's gross margin increased to 36% from 35.9% a year ago.
However, the company's painting, or "decorative" products, segment saw flat sales in the first quarter compared to a year ago.
Masco also maintained its previous guidance for 2026, continuing to expect adjusted earnings between $4.10 and $4.30 a share, with a midpoint above Wall Street's expectations for profit of $4.16 a share. The company forecasts sales will be up low-single digits in 2026.
"The structural factors for repair and remodel activity are strong, including record high at-home equity levels, the age of the housing stock, and increasing pent up demand for renovation projects," CEO Jon Nudi said Wednesday on the earnings call.
"As consumer sentiment improves, interest rates decrease and existing home turnover increases, we expect these favorable fundamentals to become a tailwind for our business," Nudi added.
The CEO also told analysts that the company's painting segment is "highly correlated with existing home sales" and that "existing home sales remain pressured."
Nudi sees the do-it-yourself market remaining "tough" in the short term while there are growth opportunities in the professional market.
Masco's financial report comes after D.R. Horton, the nation's largest home builder by market capitalization, reported better-than-expected quarterly earnings and stronger than expected margins on home sales.
D.R. Horton also estimated that third-quarter margins would be higher than consensus expected.
Margins have long been in focus for investors waiting for signs that the worst is over for builders, who have offered buyer sales incentives on home purchases at the expense of their margin.
Write to Kit Norton at kit.norton@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 22, 2026 12:42 ET (16:42 GMT)
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